“Nigeria is a challenging environment in which to operate, it is highly competitive and there are a number of other pay television operators in the market,” MultiChoice Africa’s corporate affairs manager Caroline Creasy informs me. “The media is ferocious in its criticism of MultiChoice Africa and [this criticism] is fueled by misconception and mistruth. There is a highly negative perception of South African companies operating in the rest of Africa as they are considered extremely arrogant.”
Although Nigeria’s business environment is regarded as less than investor friendly, according to Dianna Games, author of An Oil Giant Reforms- The Experience of South African Companies Doing Business in Nigeria, many companies, driven by the oil rich state’s dense population and liberalising economy, are eyeing the market or have already set plans in motion to enter it.
As one of the first multinational media companies to enter the country in 1993, Naspers-owned MultiChoice Africa has secured in that country the second largest pay TV subscriber base in Africa, second only to South Africa. Still, the company claims its presence in Nigeria and other African nations should be mentioned with less acrimony.
“MultiChoice Africa strives to be sensitive and respectful of local cultures in each country in which it operates,” states Creasy. “When the company opens operations it ensures that it consults extensively with local partners and stakeholders to ensure that it complies with the requirements of doing business in that country.”
MultiChoice Africa’s CEO Eben Greyling adds that his operations provide a number of benefits to the local broadcasting environments. “Through our involvement we’ve invested a lot of money in local content,” says Greyling. “The Africa Magic channel is 70 percent Nigerian movies. On our platform we carry five free-to-air broadcasters in Nigeria. We want to do more to make the service more Nigerian but given the fact that there are many [South African] businesses involved [in the country] you do get that anti-South African sentiment. In the same way—there are many international companies investing in South Africa. It is just part of the global economy in which we live today.”
It seems a fair point, as does Creasy’s comment about the company’s supposed weight within the various African markets – “[we’re] hardly influential as the penetration of the population is not significant enough—” But while the figures to March 31st this year for DStv subscribers in all of sub-Saharan Africa do come in at a rather low 333,781 (compared to 895,346 for South Africa alone) what can’t be deemed insignificant is the reach of the company across the continent. Its modus operandi of employing joint ventures, franchises and independent representatives has seen MultiChoice Africa entrench itself in virtually every sub-Saharan African country [see map, page—].
This vast reach is spelled out in the company’s online brochure-ware: “The African business provides pay-television and subscriber management services in 48 countries throughout Africa and the adjacent Indian Ocean islands. The group has ownership interests—in subsidiaries and joint ventures operating in Kenya, Ghana, Uganda, Nigeria, Tanzania, Zambia, Namibia and Botswana. In many other sub-Saharan African nations, [it] operates through agents or franchisees.”
Contributing to the growth of the subscriber base in many of these countries are the premium content channels M-Net and SuperSport (Naspers owns 60.1 percent of each). According to the website, “M-Net compiles 14 channels for broadcast across the African continent. These channels are carried on various satellite platforms, all of which are operated by MultiChoice Africa under the DStv brand.
“SuperSport produces nine sports channels for distribution across sub-Saharan Africa. These comprise three primarily live 24-hour channels, including a dedicated pan-African football channel, a sports update channel, a 24-hour highlights channel, a dedicated interactive sports channel and three ad hoc sports channels, covering more than 100 different genres of sport.”
That’s a lot of premium content. So does the company view itself as a threat to the respective countries’ public broadcasters? Says Greyling: “Public broadcasters are normally funded with advertisers’ money. Ours is subscription driven and we don’t compete for the revenue in those countries. We offer local broadcasters national carriage and it makes it easier for them to distribute their channels to a larger geographic reach in each country. In some countries the national broadcasters are in joint ventures with MultiChoice Africa, the benefit of this is that they get a return on investment from investing in our business and they can then use that money to fund their public broadcasters.”
So regardless of prevailing public sentiment, however accurate or misguided, it seems prospects for South African media companies looking to the continent are better than ever. “Nowadays it’s a lot less risky than it used to be 10 years ago,” continues Greyling. “There is less political instability in East and West Africa, economies are doing quite well – it’s not much different to operating in South Africa.
“The persisting problem area though, is that of the exclusivity of programming. The regulatory landscape in Africa is still underdeveloped.”
It’s a problem that the failed TV Africa, a South African-driven pan-African television network that blew US$57-million before liquidation in October 2003, knew only too well. And while it serves as a warning for some to stay away, TV Africa is viewed by others as a valuable lesson in what not to do when venturing forth. As The Media pointed out in September this year, former Nail joint deputy chairman and erstwhile SABC CEO, Zwelakhe Sisulu, is one of a number of South African media executives looking to revive the pan-African TV network idea.
Having secured a 51 percent stake in Outdoor Network and Nail Outdoor Africa (which operates in Nigeria, Ghana and the DRC), a fifty percent stake in TV production company Urban Brew, and 25 percent of Pan Africa Media Investments (PAMI) – a collaboration with continent-wide media placement and management firm African Extension – Sisulu’s goal is to leverage local expertise and knowledge in his own model. With local partners, he intends to create “a significant TV platform” that offers a range of content options to African TV markets. “We are looking initially at the DRC, East Africa and Nigeria,” he told The Media.
Another South African executive looking to take TV content to the continent is e.tv CEO Marcel Golding. By October talks had reached an advanced stage with Reginald Mengi, founder and executive chairman of East African media conglomerate the IPP Group – which runs eleven newspapers, three radio stations and a television company across Tanzania, Kenya and Uganda – but the deal collapsed at the eleventh hour. At the time of going to print it appears an alternative deal is looming with the Africa Media Group (AMG), owners of Channel Ten in Tanzania.
Then there are the radio network models. Punting itself as a “multi-million dollar media company specifically developed to make radio advertising buys easier and more efficient across Africa”, Johannesburg-based TransAfrica Radio utilises a satellite delivery system to transmit content to its network of affiliate African radio stations. The company then provides advertisers with direct access to FM radio audiences throughout the continent.
The SABC’s radio strategy for Africa [for the public broadcaster’s continent-wide TV strategy, see this month’s cover story, page—] falls under Channel Africa. According to the broadcaster’s 2005 annual report, this is “an external radio station broadcasting to Africa, and is administered by the SABC on behalf of the state.” With its stated values being support for the African Union and the promotion of cultural exchange amongst African countries, it broadcasts in English, French, Portuguese, Chinyanja, Silozi and Kiswahili. “Coverage extends to Southern, East, West and North Africa, and to America, Canada, Europe and Asia,” the annual report states, adding that in 2004, “the station began broadcasting for 24 hours a day on the PAS 10 satellite—”
Given the improved political climate, advances made by Nepad and the African Union, and rise in adspend on the continent, it’s no great surprise that such forays are becoming more prevalent. According to Peter Davies, area director of marketing communications at McCann Erickson, the total estimated advertising spend of key African markets is valued at around US$1-billion per annum, with English-speaking West Africa constituting roughly 30 percent of the figure. (Francophone West Africa and English-speaking East Africa combine for another 20 percent).
Rob Phillips, director at African Extension, cites a number of regions (specifically East Africa and North Africa) as powerful economic centres for investment, but concedes that South Africa’s unabating presence in many markets could be viewed as imperialistic. He has several theories: that Mbeki’s assertiveness within Nepad may, for some, resemble apartheid-era arrogance; that South African companies are not novices in the region and are encroaching on comfort zones.
On the positive side, Phillips’s most forceful hypothesis is that South African companies do an outstanding job with customer service. “We don’t make speeches, we just get on with it,” he says. “In every country we are in, we employ local media people so they [the citizens] can see that we are not just sending a bunch of expatriates to their countries.”
And of course there will always those that appreciate our presence. According to South African-based Kenyan journalist Isaac Esitisu, Kenyans have been quite welcoming of South Africa’s forays into their territory because they “like to hear many voices”.
“Kenya seems not too averse to cavort with outsiders,” he says. “[One of] the SABC’s first outside branches was established in Kenya with the help of the late John Louw.”